Indiana’s Tax Policies: Back to “Normal”

As the world slowly returns to normal, so do Indiana’s tax policies. In early 2020, Indiana Gov. Holcomb signed a number of executive orders designed to provide economic relief in the midst of the COVID-19 pandemic, including many favorable tax provisions and extensions. Then, on June 30, 2021, the executive orders were rescinded and many of these provisions quietly expired. Here’s what taxpayers need to know.

Income Tax

The Indiana Department of Revenue (IDOR) announced last year that it would not use an employee’s relocation to working from home in Indiana as a basis for establishing Indiana nexus or for exceeding the protections provided by P.L. 86-272 when the relocation was the result of a federal, state, or local governmental work-from-home declaration or pursuant to the order of a physician. This accommodation will end upon the end of the applicable work-from-home declaration (for Indiana, this was June 30, 2021). If the person remains in Indiana after that date, such presence can be used in determining whether the employer has Indiana nexus. The accommodation for workers subject to a physician’s order will expire the later of June 30, 2021, or the expiration of an existing physician’s order in place prior to June 30, 2021.

Use Tax

Executive Order 20-05 allowed the IDOR to waive use tax obligations on groups or organizations, including manufacturers, making donations of medicine, medical supplies, or other eligible items to fight the COVID-19 pandemic in Indiana. Because this order has been rescinded, the IDOR will not accept requests for use tax waiver for donations made after June 30, 2021.

Motor Carriers

Executive Order 20-03 temporarily lifted restrictions on the hours of service for motor carriers/drivers who deliver food, goods and items to Indiana businesses and entities for purchase or use by Hoosiers, as well as delivery of items for emergency preparedness and relief/supplies. Executive Order 20-03 was continued in subsequent executive orders. However, this accommodation was  rescinded and expired June 30, 2021, pursuant to Executive Order 21-15.

Power of Attorney

A federal power of attorney form will no longer be accepted after June 30, 2021. If you do not have a federal power of attorney on file with the state of Indiana as of June 30, 2021, you must provide or have provided a state of Indiana power of attorney form (POA-1).

KSM’s State and Local Tax professionals continually monitor legislative updates, tax developments, and market conditions to help our clients navigate these changes and mitigate financial impact. If you have questions about how these changes affect your situation, please reach out to your KSM advisor or complete this form.

Source: https://www.in.gov/dor/coronavirus-information/